Allstate profit estimate cut in half by disaster costs

Allstate Corp., the largest publicly traded U.S. home and auto insurer, had its second-quarter profit estimate cut by more than half by FBR Capital Markets on catastrophe costs from storms in the U.S. Midwest.

The estimate for Northbrook-based Allstate was reduced to 61 cents a share from $1.26, FBR said today in a report posted on its website. The insurer's catastrophe losses for the period may be $550 million to $1.1 billion, FBR said.

Travelers Cos. and Chubb Corp., both property and casualty insurers, posted profit declines yesterday on costs from the storms. An Oklahoma hailstorm cost the industry about $800 million, FBR said in the report. Allstate, which reports earnings on Aug. 4, may say profit was 89 cents a share, the average estimate of 20 analysts surveyed by Bloomberg.

"Catastrophe losses are inherently unpredictable and will undoubtedly mask the company's true earnings power" in the second quarter, FBR analysts Bijan Moazami and Daniel Lee wrote about Allstate in the report.

Allstate rose 23 cents to $28.29 at 2:49 p.m. in New York Stock Exchange composite trading, and has declined 5.8 percent this year.

Maryellen Thielen, an Allstate spokeswoman, declined to comment.